by John Carroll — on May 5, 2017 02:48 PM EDTUpdated: May 8, 2017 06:31 AM

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After years of setbacks, delays and sundry frustrations, a deeply troubled Teva says that a late-stage trial for laquinimod — long billed as a successor to the aging flagship therapy Copaxone for multiple sclerosis — failed the test on the relapsing-remitting form of the disease.

Teva’s drug — heralded as its brightest pipeline prospect — did not meet the primary endpoint, trying to significantly improve the time to disability progression compared to placebo after three months.

Michael Hayden, Teva

Investigators are still testing this drug for primary progressive MS and Huntington’s disease, but with the latest stinging failure, it’s unlikely that analysts will ascribe much potential value to the drug. At the beginning of 2016 Teva — partnered with Active Biotech — was forced to suspend use of the highest dose of laquinimod due to cardio side effects. Nevertheless, the company was predicting that it could win with lower doses and prep for a launch after completing studies this year.

Shares of Active {$ACTI: STO} dropped 66% on the news.

In the meantime, with generic competition looming for Copaxone, Roche recently won an approval for Ocrevus as a new therapy for both relapsing-remitting and primary progressive MS, looking to disrupt a market in which Biogen is seeing revenue begin to wane for Tecfidera.

Teva, though, is in a jam. Last year the company bought Allergan’s big generics portfolio just as generic drug prices were beginning to erode. That triggered a move to reorganize and cut costs, which is still just beginning. Now the company, which had tried to continue to develop branded drugs while also pursuing the generics market, finds itself with limited prospects in the clinic to excite analysts — if that’s still possible.

In early April Teva did win an approval for Austedo to treat Huntington’s chorea, a drug they bought two years ago with expectations of a quick OK. Last fall Teva incited a considerable amount of speculation about how it could one day rival Neurocrine in tardive dyskinesia with Austedo. But their mixed results also sparked more than a little kickback from analysts who prefer Ingrezza. The FDA handed Teva’s drug — acquired 2 years ago in a $3.5 billion Auspex buyout — assigned them an August 30 PDUFA date.

In the absence of a game plan, Teva is sticking with optimism in the face of defeat, putting the best face on an ugly failure.

“We have learned a great deal from the CONCERTO trial and we will continue our analysis of the data,” said Michael Hayden, President of Global R&D and Chief Scientific Officer at Teva. “Although we are disappointed by not meeting the primary endpoint, we did see positive results on a number of secondary and exploratory endpoints which fuels our belief in the potential of laquinimod as a possible treatment for neurodegenerative diseases. While we have no current plans to further pursue laquinimod in RRMS, we are continuing to study it in two other trials.”

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